Purchases and Execution of an Order

CONTENT 1. SOURCE MATERIAL 4 2. EXPECTED CHANGES OF PRICES PER MONTH 6 3. STRATEGY OF PURCHASING TO THE MOMENT OF DIRECT CONSUMPTION 7 3.1 CALCULATION OF ANNUAL EXPENSES FOR PURCHASES 7 3.2 EXPENSES FOR MAINTENANCE RESOURCES OF PRODUCTS 7 3.3 CALCULATION OF EXPENSES OF ONE TRANSPORTATION 7 3.4 CALCULATION OF COMMON ANNUAL EXPENSES 7 4. STRATEGY OF MIXED PURCHASES FOR TWO MONTHS 9 4.1 CALCULATION OF ANNUAL EXPENSES FOR PURCHASES 9 4.2 EXPENSES FOR MAINTENANCE RESOURCES OF PRODUCTS 9 4.3 CALCULATION OF EXPENSES OF ONE TRANSPORTATION 9 4.4 CALCULATION OF COMMON ANNUAL EXPENSES 9 5. STRATEGY OF MIXED PURCHASES FOR THREE MONTHS 10 5.1 CALCULATION OF ANNUAL EXPENSES FOR PURCHASES 10 5.2 EXPENSES FOR MAINTENANCE RESOURCES OF PRODUCTS 10 5.3 CALCULATION OF EXPENSES OF ONE TRANSPORTATION 10 5.4 CALCULATION OF COMMON ANNUAL EXPENSES 10 6. STRATEGY OF MIXED PURCHASES FOR SIX MONTHS 11 6.1 CALCULATION OF ANNUAL EXPENSES FOR PURCHASES 11 6.2 EXPENSES FOR MAINTENANCE RESOURCES OF PRODUCTS 11 6.3 CALCULATION OF EXPENSES OF ONE TRANSPORTATION 11 6.4 CALCULATION OF COMMON ANNUAL EXPENSES 12 7. ORDERS BY AVERAGE COSTS STRATEGY 13 7.1 CALCULATION OF ANNUAL BUDGET 13 7.2 CALCULATION OF ORDERS FOR THE BEGINNING OF EACH INTERVAL 13 7.3 CALCULATION OF AN AVERAGE PRICE 13 7.4 CALCULATION OF AN AVERAGE AMOUNT OF ORDERS 13 8. CALCULATION EXPENSES FOR MAINTENANCE RESOURCES OF PRODUCTS 15 8.1 CALCULATION OF ANNUAL EXPENSES FOR PURCHASE 15 8.2 CALCULATION ON TRANSPORTATION EXPENSES 15 8.3 CALCULATION OF COMMON ANNUAL EXPENSES 15 9. TOTAL DATA OF PURCHASE STRATEGIES 16 9.1 CALCULATION OF OPTIMAL LEVEL OF THE ORDER ( ) 16 9.2 CALCULATION OF THE NUMBER OF ORDERS (N) 16 9.3 TIME CALCULATION BETWEEN ORDERS (T) 16 9.4 CALCULATION POINT OF ORDER (QZ) 17 10. CONCLUSIONS 18 10. Conclusions In the paper the following strategies had been calculated: - Strategies of purchasing to the moment of direct consumption; - strategies of mixed orders for 2,3 and 6 months; - Strategy of the orders by average costs. Forwarding orders have not been considered due to the season demand. On the basis of received data we can say that the most optimal strategy in this case is orders by average costs strategy, that has the lowest expenses. Optimal storage level is equal 2143 units. Purchases should be ordered 23 times per year with 9-10 days intervals. Upon reaching that level, the new order should be made that is equal 2618 units. The work shows, that optimal size of storage is proportional to expenses for orders and otherwise proportional to transportation expenses. In our case, because of low price for products in specific period, we can spend maximum on resource storage, but win on transportation expenses.